As technological advances continue to modify and form how we work, a sea change in U.S. demographics is also pushing for and even demanding changes to the traditional work model. Millennials (ages 18 to 34) are becoming the dominant generation, and through sheer force of numbers are bringing with them new ways to work, live, and play. Continuing technological advances and our transforming demographics will continue to bring about significant changes over the next decade in how we define an employee and how we represent a workweek.
For those companies that aren’t nimble enough to follow the pack or brave enough to be out in front, these changes will have a significant and profound impact. It’s truly a global “game-changer,” approaching us not at the speed of a comet, but at the speed of light — and with all the sights and sounds of the ever-changing digital world.
A Major Shift
The year 2015 has already been an historic one. In March, for the first time in history, U.S. citizens spent more money at restaurants and bars than at grocery stores (excluding big-box retailers). This Commerce Department statistic speaks volumes as to the direction America is going — a service-oriented society where others, for a fee, are doing things for us, which in turn is allowing us more free time for other things that we think are important. This phenomenon represents a major shift in our economy and how we “live, work, and play.”
Putting aside utilities and infrastructure for the moment, I see quality of life and availability of talent as being the two biggest drivers for success, and the first rural communities to the finish line with a solution that meets both will be the leaders of tomorrow and will re-write history and how we all live, work and play. Tom Gray, Grand River Dam Authority The traditional large offices with window views have evolved to cramming our workforce into rows and rows of cubicles and then to never-ending benches, and we are now moving to “just-in-time” spaces within a vibrant urban community that blends the shades of work and play. Enjoying what you do and how, when, and where you do it is resulting in higher retention rates and attracting some of the best and brightest to work for a forward-thinking company over one tied to the status quo. Today’s workforce and its desire to be engaged and challenged are driving businesses into areas previously unknown or not considered viable.
We in the commercial real estate world have in some respects encountered half-truths for years. We’ve been told real estate is all about “location, location, location.” I will say that this is still true for the retail industry and residential property. We may want to live in one neighborhood over another, or have our children go to one school over another. And traditional brick-and-mortar retailers may choose one corner over another, but those three “Ls” mean less and less when it comes to office and industrial site selection. I tell my clients it is not the three “Ls” that drive corporate relocations and expansions, it’s the four “Ts”: talent, technology, transportation, and taxes. Companies can make almost any parcel of land work (excluding environmental inadequacies) if these four critical pillars are fully understood and adequately addressed.
1. Talent: For years availability of labor has been driving not only the site selection process but also the success of companies worldwide. Today we are starting to see company-specific curriculum being addressed at the Associate and Bachelor degree programs, including co-ops and internships, to provide for a steady flow of highly trained candidates for corporate America. Collaborative approaches between government, colleges and universities, career technology centers, and companies have made major strides and are still evolving.
2. Technology: Technology and the resources upon which it depends drive businesses forward. From traditional utilities such as electric, water, and sewer to high-speed broadband access, all provide a base upon which the “cooler” technologies (known today, and under development for tomorrow) can flourish.
3. Transportation: Airports, roadway and rail infrastructure, and access to each other keep businesses and people connected.
4. Taxes: I use this final category to cover the overall cost of doing business and the business-friendliness of the community, county, and state. A location with high taxes, inferior transportation, outdated technology, and little available talent stands no chance in making a site selector’s short list — even if it’s the prettiest place on earth!
There is also an underlying belief that “quality of life” is more and more of a driver than it was just a couple of years ago. This quality-of-life quotient will continue to rise on the critical list of business drivers for all levels of corporate professionals (from the most experienced CEO to the entry-level intern). Also, the availability of services that make life easier and save us valuable time and energy will be motivating factors for where people live and work.
Change Is Upon Us, Ready or Not!
America is also undergoing a truly spectacular evolution in how and when we work. Our millennials (ages 18–34), who are making up a greater percentage of our workforce, are bringing fresh ideas to the workplace and pushing change more than any generation before them. Millennials, also known as Generation Y, are questioning the very fabric of “live, work, play.” According to the U.S. Census Bureau, this year millennials outpaced baby-boomers (ages 51–69) as a percentage of the U.S. Population.
Some of the millennials’ most notable traits include approaching a career as a series of individual challenges and life as a series of shared experiences. Their neighborhood and circle of friends don’t necessarily include the people with whom they are living in close proximity, but may include people from all across the world who share similar interests and goals, and connect frequently through social media. Technology allows all this to happen, and when technology is leveraged appropriately, it often results in efficiencies, freeing up time for a bit more play.
Technology drives convenience and community, which allows for sharing of ideas and experiences. Also, as a society, we are more transient than we’ve been in a while. This is not just transient in a geographical sense, but in a lifestyle sense. More and more, we choose to lease a car vs. buying, and to rent an apartment vs. owning a house. Millennials are moving quickly and efficiently as the globalized and tech-savvy country becomes their playground at large.
Often, in larger cities, millennials will trade in their cars and the associated expenses inclusive of monthly payments, repairs, insurance, and gas, for public transportation and a bit more cash in their pockets. It is this “millennial-driven evolution” that got us looking directly at how smaller communities could compete with the pull of big cities for top local/national talent.
A Case Study: Urban Living in Rural America
So using the four “Ts” approach, a working group was assembled to look at MidAmerica Industrial Park. The industrial park, centrally located in the Midwestern United States, consists of 9,000 acres 40 miles east of Tulsa, Oklahoma. The challenge was simple: how does one make an industrial park “cool” and how can it compete for jobs from coast to coast (San Francisco to New York City)?
And the answer seems to be, use what increases the uniqueness of the space and the appeal to a workforce and add in all the services, technology, and conveniences anyone could wish for. Who knew that hiking and the great outdoors would have an even more profound and ever-increasing allure and thus ascend to an even higher level of “cool,” or that we would all be texting and not talking on the phone? In the case of Pryor, Oklahoma, “cool” is the proximity to Tulsa, the cultural and arts center of the state, and to Grand Lake, home of world-class bass fishing and outdoor experiences, coupled with several Fortune 500 giants already calling the park home.
The planned urban development within a rural community setting would include new construction vs. renovating and updating older structures. This route avoids environmental issues and cost overruns often associated with building re-use (asbestos abatement, lead paint contamination, structural inadequacies, etc.). In addition, somewhat like a combination of a gated community and a college campus, public safety is closely monitored and enforced. The thought is to have the best of both worlds (an urban edge, yet a country feel) and, finally, a place close to nature and very pet-friendly where one can enjoy the outdoors and all that includes (walking, running, biking, etc.).
Thus, urban living in rural America, like the park outlined, would include the following:
- Residential — Technology-rich, open-concept rentals with concierge services and community-only space
- Services — retail, business and consumer services, and dining establishments
- Entertainment — an independently operated attraction
- Conveniences — shuttle service and communal bicycles
- Green space — appropriate for outdoor activities and central gatherings
We have all heard the expression, “If you build it, they will come.” For years we have seen young, talented individuals leave rural and suburban communities for larger cities. Part of that quest is for new and challenging experiences and for the excitement big-city living has to offer. But just as important is the search for employment and the ability to connect premier positions with top-level talent. The real question is, “If you build it, will they stay?” In my opinion, jobs (availability and talent pool) and the existence and attraction of employers are very important, if not essential. And if talent is given an opportunity to stay near home and is provided the state-of-the-art amenities and services that urban living has to offer, many will choose to combine a career with the comforts of home. With technology today, all we know is that tomorrow will be vastly different.
Making a Bold Move
Now that we have a handle on what the millennials want, we can begin to forecast what the forward-looking C-suite executive needs. Solving that riddle has and continues to be one of the central factors in both short- and long-term corporate success. And with millennials outnumbering baby-boomers in the workforce, the time for a bold move is now. The C-suite executives — the ultimate decision-makers as to where the jobs are and what those millennials will do — are also looking for something “cool and unique” — both for themselves (today and into retirement) and for their children and grandchildren. And don’t forget, today’s millennial will be tomorrow’s CEO, if he/she isn’t already.
The future will present us with increased choices combined with increased demands on our time. We will likely be a more service-driven society than we have ever been. Job opportunities, for those who are nimble and technology-facing, should be available. And the companies and communities that figure out the future of our next generation of employees and catch the attention of the C-suite executives will lead us forward. Trying to find the right mix of “play, live, and work” in this jumbled world will be integral to the success of employers and employees alike. We live in interesting times and the next decade will define a generation of talent and open doors that we didn’t even imagine existed.
This article does not constitute tax, legal, or other advice from Deloitte Tax LLP, which assumes no responsibility with respect to assessing or advising the reader as to tax, legal, or other consequences arising from the reader’s particular situation.